tax deductions

[jim]

Ok,it's getting close to tax deadline and I wonder if there are any "creative" accountants out there. I know you can deduct the interest paid on a boat loan, as the boat is a second home. (given you can sleep, eat, etc on the boat).I was wondering about "rent" paid for slips, winter storage, hauling etc as cost associated with the second home. I know an apartment renter can deduct part of the rent as real estate tax. Any thoughts on deducting part of boat rent?Any help appreciated.

 

[Peggie Hall/Head Mistress]

No

Unless the boat is in charter or you're a licensed captain who carries paying passengers (in which case you'd have to declare the income in order to take any deductions), the interest on your loan is the only thing you can deduct.

 

[Andy Howard]

Tax man commin' to take you away

Every spring I go down to the boat by myself for the weekend to do our taxes. No kids, no phones, just me and TurboTax. Every time I get to the tax preparation fees item, I smile and wonder how much luck I'd have convinsing the auditor that I simply couldn't get it all done if I didn't have the boat to do it on.Anyway Peggy's right, unless you have earned income from the boat, only the interest is deductable. I would however keep up with capital improvements costs just in case hell freezes over and you sell the boat at a profit one day to offset your cost basis.

 

[Peggie Hall/Head Mistress]

No capital gains or losses on boats

The tax laws treat boats the same way they do vehicles. So there's nothing to offset. Just count your blessings that the interest on the loan is deductable. However, only ONE second home mortgage interest is deductable. If you have two boats that qualify (i.e. you bought before you sold your previous boat or you're well off enough to afford more than one) or you have a beach cottage AND a boat, you have to pick one.Btw, selling at a profit isn't all that uncommon if you start with a "project boat." I did.

 

[Robert]

2nd Home

Peggy is correct in that you can only have one 2nd Home loan as a write off. I chose to use a Home Equity loan to purchase my second boat and then refinanced both into one home mortgage.. (No, I'm not that well off, just hadn't sold the first one yet). That interest is credited to my home and is written off as the first home mortage. That leaves the 2nd home open for the second boat.

 

[Steve Growcock]

personal property tax too

ditto on the home equity loan. If you are required to pay personal property tax for your craft, you may be able to deduct that amount on Federal.Steve!

 

[Stephen Ord]

Must be nice to deduct the interest

FYIIn Canada you cannot deduct the interest on your Boat or Home (unless used for business). Bu we do not get charged capital gains on our residence though (Who made money on selling a house recently - not around here).